Byron Thompson from Monument Real Estate Management is joining The Property Management Show to talk about a subject we’ve never addressed on this podcast: urban real estate markets.

Byron has been a listener for a long time, and we’re happy to have him in the guest seat today to talk about the unique challenges and opportunities for both investors and property managers who work in urban markets such as Cleveland, where his company is based.

Introducing Byron and Monument

Byron owns and operates Monument Real Estate Management in Cleveland, Ohio. They manage properties and portfolios in Columbus as well and recently, they’ve begun expanding into the Carolinas. There’s a strong growth mindset in his business operations, and he’s always looking for new opportunities.

What’s unique about Cleveland is that it has a strong urban market that he talks about in his book: Your Guide to Investing in the Urban Real Estate Market.

The urban market doesn’t get a lot of attention from influencers in our industry and speakers at

conferences. No one has been talking about it, so we asked Byron how he found himself in this niche.

Discovering and Exploring Urban Real Estate Markets

His journey began in 2016, when he got his Realtor license and immediately started working with investors who had good portfolios. Many of these investors had been buying properties all around the country and finally landed in Cleveland.

While he worked with them to locate and purchase properties, he learned a lot about real estate

investing. They were buying 15 or 20 or 30 houses a month. This was a big education, both in real estate and property management. The investors asked him to manage the homes for them when they became rentals. At first, he said no. But, he soon realized the opportunities this could provide.

That’s how Monument Real Estate Management began, and it didn’t take long to realize how different the urban market of Cleveland was from other real estate markets.

How We Define an Urban Market

According to Byron, there are three conditions that must be present in order for a market to be

considered an urban market:

1. The overall economic conditions of the city. It’s usually poor. Crime rates are likely to be higher.

Available housing and employment rates are likely to be lower.

2. The assets investors buy are going to need more maintenance for asset. Most of these homes will be older; potentially 100 years old, even.

3. There’s heavy government compliance to the management that’s requirements in an urban

market. There are more Section 8 homes. There are more inspections. You’ll have more

transient tenants and potentially more evictions.

Byron has identified and researched similar markets in cities like Birmingham, Memphis, and Detroit. There are a lot of similarities there, but also unique challenges in each urban market when it comes to investing and managing.

Urban markets will generally focus on C and D class properties. These are high risk and high reward, versus other markets that provide a slower yield. They’re generally safer. They focus on A and B class properties, which provide less risk and fewer headaches.

If you’re going to specialize in the urban market like Byron does, you have to know what makes them lucrative for property managers and investors.

For property managers, it’s all about volume of business. The number of rental homes in urban

markets is high. They need management because these markets are heavily impacted by

investments. Most of the investors are out of state or even out of the country.

For investors to make money, they must have the appetite for high risk and high reward. There’s

an opportunity for heavy cash flow and these can be cash-positive investments.

You need to know the risks, as a property manager,